Video poker legislation divides panel

HARRISBURG - Democrats and Republicans split sharply Thursday on legislation linking college tuition aid to the legalization of video poker machines in Pennsylvania, clashing over what to do about the spiraling cost of education in the bill's first public airing.

The proposal by Democratic Gov. Ed Rendell is the biggest step taken in his six years in office to address the cost of a college education.

Significant challenges await the legislation, including a threat by the state's slot-machine casino owners to seek repayment of their $50 million license fees on grounds that the machines' legalization violates an agreement not to expand gambling.

In the first of four planned hearings, the House Gaming Oversight Committee heard from a top Department of Education official who warned that college is getting too expensive for an increasing number of young adults, fraying the state's long-term economic health.

However, Republican lawmakers attacked the proposal as fatally flawed. It would do nothing to keep down the cost of college, fuel gambling addiction and provide cover to mollify casino owners by legalizing table games, they said.

Addressing the dozens of high school students sitting in the hearing room, Rep. Curt Schroder, R-Chester, said they should ask themselves, “Do you really want your education funded on the backs of families broken by addiction?”

The legislation's sponsor, committee Chairman Dante Santoni Jr., D-Berks, contended that the average person who plays a video machine is not an addict.

“The average person … is just Joe Six-Pack going into the tavern, having a couple beers and putting $20 in a machine and I don't think there's any harm in that,” Santoni said.

Jim Pappas, the executive director of the Council on Compulsive Gambling of Pennsylvania, told the committee that no research has been conducted on whether the addition of the machines sows more gambling addiction.

But he asked for a moratorium on legalizing the machines until their impact is studied and said poker games are the No. 1 choice among young people and college students with gambling problems, Pappas said.

The machines are to be regulated by the Department of Revenue, which also runs the Pennsylvania Lottery. Rendell administration officials call the machines “video lottery terminals,” which are capable of playing a number of games, not just poker.

The machines are virtually indistinguishable from slot machines, except they are controlled by a single random number generator housed in a central state computer and they select winning prizes differently.

The machines do not represent an expansion of gambling because the state is simply moving to replace and regulate illegal video poker machines that are already played at bars and taverns, testified Stephen Stetler, Rendell's Revenue Department secretary.

Administration officials also say legalizing the machines does not violate an agreement with casino owners.

All told, the bill would allow as many as five machines to be installed in up to 14,000 restaurants, bars and clubs that have liquor licenses. However, Rendell administration officials estimate that about 8,800 establishments would sign up for an average of four machines.

The minimum payout would be 80 percent of the wager and prizes would be capped at $600.

Once all the machines are operating under the proposal, the Rendell administration expects them to generate about $1.1 billion per year.

The state would take half of that to help as many as 170,000 students attend a state-owned university or community college, including an estimated 10,000 who can't afford the cost or might otherwise attend college in another state.

Help would be distributed on a sliding income scale up to $100,000. Families earning less than $32,000 would pay no more than $1,000, while the annual grants would top out at $7,600 for families that earn slightly more.

Currently, more than 300,000 students pay about $850 million in fees and tuition to the state's 14 state-owned universities and 14 state-run community colleges.